the role of it in running an effective medicaid program

The Role of IT in Running an Effective Medicaid Program

William D. Hayes, Ph.D., President

[email protected]

Health Policy Institute of Ohio

http://www.healthpolicyohio.org

37 W Broad Street, Suite 350

Columbus, OH 43235

614-224-4950

September 8, 20051

http://www.healthpolicyohio.org/

Medicaid Functions in a Highly Flawed U.S. Health Care Delivery System

• Per the Leapfrog Group, the quality of the U.S. health system is equal to how well the airline industry handles baggage– versus the safety record for flying planes

• Per researchers at Rand Corporation, providers follow best practices on average 54% of the time

• Per Midwest Business Group on Health, 30% of U.S. health spending adds no value or creates negative value (overuse, not enough use, or misuse)

2

Medicaid as Four Different Types of Health Insurance Plans

• Medicaid consists of 4 types of health insurance plans, with differing eligibility requirements, provider systems, and delivery approaches:– High risk pool (even for higher income

families) – Regular health insurance plan, especially for

children and some of their parents– Long term care plan (even for middle income

families)– Largest Medicare Supplemental plan

3

Medicaid Delivery System Realities in Ohio• Two delivery systems for acute care services:

fee-for-service and full risk managed care• Over 35,000 fee-for-service providers• Currently 5 full risk managed care plans• Pharmacy runs through a point-of-service system• Long term care costs account for almost 40% of

spending, occurring either through a set of institutional or various community-based long term care providers

• Consumers get a medical care monthly showing that they are enrolled in the Medicaid FFS or managed care delivery system

4

Medicaid and Private Health Plan Comparison

• Medicaid is an entitlement plan; must take all who meet eligibility standards

• Almost 50 different mandatory or optional eligibility categories with different standards

• Eligibility based on some or all of the following criteria: age, income level, asset level, disability status, residency, pregnancy

• Limited cost sharing options• Typically, administratively set provider

payments• Part of Medicaid population more expensive &

sicker to cover than the general population5

Medicaid and Private Health Plan Comparison

• In Ohio, Medicaid administration involves management relationship with federal government, single state agency, other state agencies, and local government agency

• Medicaid programs spend, on average, around 4-5% for all administrative functions

• Medicaid program often seen as liability, cost center versus a profit center

• Administrative appeals process typically favors the consumer, especially on clinically-based actions

• Public rule making process for all program changes• Population-based orientation

6

Critical Operational Processes for the Medicaid Health Plans

• Medicaid’s operational needs similar to private plans. These needs include:– Eligibility determination and notification– Provider enrollment and relations– Consumer education and relations– Claims payment– Fraud detection and investigation– Outcomes monitoring and evaluation– Contract procurement and management– Coordination of benefits (Medicaid to be payor of

last resort)

8

Critical Operational Processes, continued– Account reconciliation with federal government– Budget forecasting– Value purchasing, including support for move to

pay for performance– Consumer cost sharing– Public health system surveillance and tracking– Health outcomes improvement– Information system maintenance, development,

and integration– Health system research– Ability to answer program questions in timely

fashion– Audits from federal and state oversight bodies

9

How Medicaid Match Works with IT

• Medicaid program runs on state funds combined with federal matching funds

• IT efforts currently get an attractive match, often at 90% or 75% for development. (The match is usually 50% for regular operations)

• Current federal government proposals, especially setting a block grant on administrative expenditures, could hurt IT investment

• Often Medicaid can support IT efforts of other state agencies, if effort has an effect on the administration of the Medicaid program (e.g., immunization tracking system development)10

Medicaid Administration Challenges & IT

• How to keep slow the rate of ongoing cost growth, preferably to at or below average cost of state revenue growth (4% a year)

• How to coordinate eligibility, services, and information sharing across mixture of federal, state and local agencies, each with aspects of management responsibility and power

• How to foster effective emphasis on IT enhancement within existing state government structures and processes

• How to make sure that policy makers consider realities of implementation when making decisions11

Total ODJFS Medicaid Spending 1992 - 2005

1

2

3

4

5

6

7

8

9

10

11

12

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 est 2005 est

State Fiscal Years

Spe

ndin

g in

Bill

ions

6.73%9.91%

1.81%7.76% -.88% 4.0%

% Change from Previous Year

5.75%

8.16%

14.9%

12.66%

12.29%

11.6%

6.71%

Reduced growth in SFY'04-05 (the lowest since SFY '98-99) is the result of $863 million in cost containment strategies enacted in HB 95, Biennial

Budget

20.42%

Federal welfare reform caused eligible people to

leave Medicaid rolls & masked ongoing PM/PM

growth Recession of the early '90s is reflected in large % growth. NF prospective payment system developed and put into place in

response to double digit growth.

Recession of the 2000 decade is

reflected once again in large % growth, in part due to return of Medical inflation

growth.

12

Office of Ohio Health Plans…& the need for change…

OHP runs Ohio’s Medicaid program and is…• 6th largest public health care purchaser nationally

– 33% state expenditures

– 76% Ohio Department of Job and Family Services expenditures

– $12 billion in SFY 2004

• Value Purchaser – covering– 1 in 3 births & children

– 1 in 4 seniors over the age of 85 years

– 75% of long term care costs

• 3rd oldest legacy system in the country– Build by SMEs & served OHP well in the past…

– MIS’s largest customer…

CRIS-e1.8M members

94% CRIS-e cases`96 Delink

MMIS

65M claims30 Rx, 25 Tape, 10

Paper42% OHP - Operations

Financial$12B OHP

13 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay,

Ohio Medicaid Information Technology System (MITS)Business Transformation

Technology

• Antiqued technology

• Multiple core systems

• Numerous stand-alone, non-integrated systems

• Lack of management data, data integrity, privacy/security protections

Business Drivers

People

• OHP functional silos

• IT Medicaid IS legacy system staffing, lack customer service focus

• Reactive–crisis oriented

• Task, not analysis, oriented

• Limited skill sets-COBOL

Process

• Manual, work-arounds, re-work

• Policy without implementation

• Paper, Paper, Paper

• Limited business case, impact analysis, prioritization, governance

Business Pressures•Regulatory Demands•Rapid Change•Demand Growth •Cost Containment•Legislative & Commissions Recommendations•Audits & Oversight•Workforce Changes

Change Realities•Legacy system, hard code•Slow, inflexible & costly•Control-D Reporting•“Work-around” mindset•Limited automation projectsProject Results•HIPAA – 3 yrs & $30M•TPL – 6 yrs, “pay & chase” •Buy-In – 13 yrs, huge county problems •CRISe De-link – 8 yrs•Request backlog - 350+

“PACMAN ofState budget.” - Governor



OHP Strategic Plan

ValuePurchasing

Ohio Access-Disabilities

Services & Choice

BusinessProject &

PerformanceManagement

Cost Management

WorkforceExcellence

As Medicaid agencies move from a regulator to valuepurchaser of quality services for health plan enrollees, they mustfundamentally shift their design, management, & technology

Strategic Changerequires TechnologyTechnology Change



Enterprise ArchitectureE-Gov Federal CIO Council

Data Architecture

Applications Architecture

Conceptual Process ModelInteroperability Model

Technical ArchitectureTechnical Models

Technical Reference ModelsStandards

Business Business ArchitectureArchitecture

Business Reference Model

“The value of IT is best measuredby the contribution IT makes towards achieving agency business goals and business objectives.”

- ODAS ITP-D.4

Business Governance – roles, decision making

process



CMS Medicaid IT Architecture Enterprise Business Needs = Enterprise Architecture

•Increasing Costs•Increasing Needs•Obsolete Systems•Emphasis on Business Benefit

•Rate of Change Increasing•New Public Health Focus

•National Initiatives•Focus on Beneficiaries•Focus on Data Exchange

•Ongoing Standardization Supports Data Exchange

MMedicaidIInformationTTechnologyAArchitecture



MITS GoalsCMS selected Ohio as early adopterearly adopter of MITA*

To implement “business drive architecture”– technology that supports the businessneeds of the Medicaid enterprise

To streamline systems development building on the MITA business model

To implement value purchasing tools to improve performance results, health outcomes & quality & cost management

To improve Ohio’s return on investment through federal enhanced reimbursement for MITS planning, design, development & implementation

Rate of ChangeComplexity & GrowthWorkforce ChangesIncreasing DemandTech RigidityOversight, AuditMotivation, Skills

*Adopter MOU – (1) Ohio Business Model, (2) MITA Self-Assessment, (3) APD Process, & (4) Hub Architecture



MITS Business Model

CMS MITA6 core processes, 27 sub-processes

I. Member Management

II. Provider & Contract Management

III. Payment Management

IV. Utilization & Quality Management

V. Information ManagementVI. External Data Sharing & Exchange

ODJFS MITS11 core processes, 60 sub-processes

1. Project Management

2. Member Services - Eligibility & Enrollment

3. Benefits & Service Administration

4. Customer Relationship Mgmt (Provider Services)

5. Contract Management

6. Financial Management7. Claims & Encounters

8. Program Integrity?9. Quality Management?

10. Management Information11. Privacy & Security?

*Integrate LTC functions acrossbusiness processes

To Be Model



MITS Business Model

MITSMITS

Project Management

CustomerRelations Mgmt (Provider Svcs)

Member Services(E & E)

Benefit & Service Admin

HIPAAE-Claims &Encounters

Privacy & Security

Management Information

ContractManagement

FinancialManagement

Quality Management

Program Integrity

20

Findings – Technical Gap AssessmentTechnical Gap Assessment

MITA Portfolio Description ODJFS Score Key MITA Scoring Rationale

Interoperability System-to-systems communications 1

Systems developed and maintained separately Point-to-point interfaces limit commonality Integration achieved through individually developed interfaces

Data Management

Medicaid enterprise-specific data

1 Data modeling performed on a system by system basis No enterprise standardization of data affects reporting

capability

Data SharingCoordination

Collaborative agreements & standards to enable data sharing in/outside Medicaid enterprise 1

Limited to point-to-point interfaces that are necessary for claims processing

No data sharing being performed outside of the organization for health outcome purposes

Security & Privacy

Secure & private mechanisms to facilitate exchange of information among multiple organizations

1 Most systems have their own security and privacy design Access to each system managed and administered separately

Adaptability & Extensibility

Utilities that can be tailored (adapted) & added (extended) to meet state needs 1

Adaptability and extensibility limited to look-up tables maintained for individual systems

Changes to code are ‘hard coded’ and performed manually

Performance Measurement

Standard policy & performance measurement capabilities 1

Focused primarily on claims processing measurements Data warehouse solution not optimally targeted

Business Area Improvement

Applications to improve Medicaid business processes 1

Business improvements primarily focused on claims processing only

No transparency into claims adjudication process

21

Recommendations1. Transfer MMIS +

– Significant, additional capabilities– Incorporate Info Delivery & Internal Admin

requirements

2. Assess CRIS-e to Modify or Replace – Do not delay MITS to complete assessment

3. Determine Sourcing Strategy – In-house vs. fiscal agent new system operations

4. Implement Infrastructure Changes – nownow to enable systems change– People Process Technology

Very favorable business case – 3.8:1

22

What Information Needs Do People Want to be Solved?

• To enhance effectiveness of Medicaid program for consumers, providers, and program staff could use:– Online enrollment for consumers and providers– Online eligibility status check– Access to electronic health information, especially

diagnoses and prescription medication data– Easier linking between eligibility and administrative

data systems within and among agencies– Improved value purchasing and fraud detection tools– Better communication on practice patterns with

providers and consumers

23

The U.S. Health System is in Crisis

(Don Berwick, M.D., 2002 Escape Fire speech)

http://www.cmwf.org/usr_doc/Berwick_escapefire_563.pdf

“We have tens of millions of uninsured Americans, significant medication errors in 7 out of every 100 inpatients, tenfold or more variation in population based rates of important surgical procedures, 30% overuse of advanced antibiotics, excessive waits through our system of care, 50% or more underuse of effective and inexpensive medications for heart attacks and immunizations for the elderly, and declining service ratings from patients and their families.”

24

the role of it in running an effective medicaid program

Documents

health system

health care delivery

medicaid administration

medicaid functions

health spending

managed care delivery

parentslong term care

medical care